January was a slow month for NAIC committee activity as regulators recognized industry is diligently working on producing its annual statements by the March 1 filing deadline. However, activity can’t come to a complete halt or changes won’t be in place in a timely manner for 2024. The following groups continued their quests during January.
Statutory Accounting Principles Working Group (SAPWG) – January 10, 2024 and January 31, 2024 via email
SAPWG began 2024 with the adoption of two items needed for year-end 2023 and exposing one item to further the work of the Principles-Based Bond Definition Project.
| Reference # | Subject | Disposition |
|---|---|---|
| 2023-24 | Rejection of Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), and related ASUs. | Rejection of CECL was adopted, with effective date of December 31, 2023. |
Originally exposed for comment on December 11, 2023 with the comment period ending February 9, 2024, the comment period was shortened to December 29, 2023 at the request of interested parties (IPs). In their request, IPs noted that ASU 2016-13 is effective for non-public companies preparing U.S. GAAP financial statements starting with December 31, 2022. For insurance entities required to file audited statutory basis financial statements under the Model Audit Rule, the requirement would have been effective for audited financial statements as of December 31, 2023. IPs felt it would be clearer from the auditor’s perspective if the GAAP guidance was addressed by statutory accounting.
| Reference # | Subject | Disposition |
|---|---|---|
| INT 21-04T | Scottish Re Life Reinsurance Liquidation Questions. | Adopted with December 31, 2023 effective date. |
This INT applies to the reporting of amounts receivable from the liquidation of Scottish Re. The liquidation affects approximately 120 companies. Prior to adoption, revisions were discussed and made. All companies affected should review the INT carefully for applicability to their accounting and reporting. The INT is effective beginning with year-end 2023 reporting. As a brief summary, the INT covers the following:
- Accounting and reporting of reinsurance recoverables from Scottish Re Forvis Mazars.